Business case for investment10/05/2016
Many organisations have typically viewed software expenditure as a cost. At Cloud9 Software we believe our flagship Contract Management product intelligentcontract.com can make a positive difference to your cost-base and allow you to materialise real monetary savings. By giving you the right tools, it becomes a lot clearer and simpler to generate savings from your contractual agreements.
This whitepaper outlines the typical savings that can be achieved when intelligentcontract.com is utilised within a typical organisation. Savings are achieved are calculated from three key areas:
- Administration Savings: By automating the process of creating, managing and archiving contracts, you are freeing time for staff to work on other value added activities. It may even be possible to re-deploy staff to other areas.
- Better Contract Focus: By using alerts functionality it is possible to avoid roll over contracts. You are able to check the amounts that are charged are in line with the contractual agreement. You are able to approve contracts before they are signed to be sure they are not committing the company to unfavourable terms and they are within organisation procurement policy. You are able to monitor contract risk and be sure that clauses such as "termination for convenience" are actively monitored and migrated actions are pre-planned.
- Improved Category Management: By having all the spend data for contracts in one centralised location and having alert functionality to give ample time before contracts are up for renewal, it is possible to plan re-procurements in a structured way. Aggregating demand across your organisation and moving to better value contracts with a single supplier will deliver the savings outlined here.
Buying contract management software is similar to any business purchase - it's important to understand the business case for your investment.
Whilst we are able to provide a tailored estimate of the likely monetary savings on request, this white paper presents the typical savings you can expect to realise when you invest in our software solution.
Below we have presented a typical business case for intelligentcontract.com investment. We have made a number of assumptions in order to derive these specific numbers. The assumptions are not unrealistic (in fact, we have been prudent when arriving at these assumptive values).
This business plan presents the costs of a 4 user deployment of intelligentcontract.com (assuming the standard configuration service is purchased along with a user licence for each member of staff) and the resulting savings over a three-year period.
Note that the payback for the investment in the intelligentcontract.com solution in this typical case was just over 6 months.
The following tables provide the parameters that have been used in order to generate the savings numbers shown above in each of the savings categories.
Contract focus savings
It is important to understand that these savings are a typical example and do not indicate the level of savings that your specific organisation is likely to realise.
We want to demonstrate that the benefits outlined in this business plan are prudent and therefore achievable. Below we have highlighted some of the assumptions that make up the numbers presented and the reason why they are prudent.
- We have assumed only indirect spend can be influenced. It may be that your direct spend can also be affected and the savings level will be even higher;
- For "contract focus" and "category management" the savings outlined only have benefit counted in the year that they were generated. Some savings calculators may take a saving horizon of 3 or more years that relate to cost avoidance.
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